Down on the Upside

No one is ever going to confuse the Pittsburgh Pirates for a team trying to buy its way into contention, as seems to be so popular in the uncapped and uncanny financial world of Major League Baseball.

And that’s fine.

Pittsburgh has always forged an identity as a team that spends low. For years, that meant the team scraped the bottom of MLB’s talent barrel while waiting on fat revenue sharing checks and operating a concession stand with a nice lawn on Pittsburgh’s north shore. That hasn’t been the case under the current management group, and six years of patience and planning bore fruit in the form of a long-awaited playoff berth last season.

Following the successful 2013 campaign and a strong spring training, the Pirates could be comfortably settling into their new normal as a team that doesn’t spend low, but spends well — that is, a club that keeps things tight to the vest but manages to contend nonetheless.

The Pirates might sometimes let slip a useful free agent roster piece where none is available internally. That’s always going to be the case when the team paints itself into a payroll corner such that an extra year for a league-average free agent first baseman is the straw that breaks the Nutting’s back.

However, it’s not as though the Pirates aren’t spending money. They just aren’t spending it all at once.

There’s quite the gulf separating the Pirates and their 27th-ranked Opening Day payroll from the league’s big spenders. Consider the Pirates’ biggest deals this offseason: contract extensions given to Starling Marte (six years, $31 million with two option years that could make the deal worth $55 million over eight years’ time) and Charlie Morton (three years, $21 million with one option year that could bring his total to $30.5 million).

While some will bemoan the Pirates for having made Edinson Volquez their richest free agent addition at $5 million for one year (while others still will bemoan the team for forfeiting A.J. Burnett’s services over a relatively small amount of money), they still managed to commit more than $50 million dollars to the payroll over the next six seasons — seasons which, by the way, fall smack in the middle of Andrew McCutchen’s prime playing days.

The real genius of the Pirates’ contract extensions? The team is signing its own players while they are young, affordable and relatively inexpensive. That’s a far cry from how the league’s big spenders have conducted business.

The greatest single example belongs to the Detroit Tigers, who signed Miguel Cabrera to what is essentially a 10-year, $292 million contract extension just before the 2014 season got underway. Cabrera is one of the greatest hitters of his generation, but he’s also about to turn 31 years old. That makes him likely to fall well short of the monumental expectations that will no doubt come with his monumental contract extension.

Right now, Cabrera is a triple-crown winner. That’s nothing to sneeze at, and his historic numbers coincide with his historic money. Ten years from now, when his deal will have reached its end, he’ll be 41 years old, occupying a comfy role as a designated hitter and likely not doing much else.

It may seem like a reach now, given his consistent excellence and generally consistent health (he did battle a groin injury during the 2013 playoffs that ultimately required surgery), but something will happen to Cabrera, just like something happened to [Ryan] Howard, because they’re both human beings in addition to baseball players, and this is the kind of stuff that happens as people age.

Though Cabrera is a better hitter than Howard ever was, the Detroit slugger turns 31 this April, which means he’ll probably get hurt, or see his numbers decline, or both in the next three to four years. That’s what happens to most major leaguers, even the great ones, as they progress into their thirties. As Yahoo’s Jeff Passan wrote, only six players in baseball history have ever been good enough during their age 33-40 seasons to justify the money per win the Tigers will spend on Cabrera: Barry Bonds, Babe Ruth, Willie Mays, Honus Wagner, Hank Aaron, and Tris Speaker.

So while there’s a semblance of a chance that Cabrera could justify the money and years the Tigers are giving him, doing so will require performing like a true inner-circle Hall of Famer and one of the six best players in baseball history, which is a pretty absurd standard to have to meet.

If Cabrera fails to live up to the money he’ll be earning, he won’t be alone. He’s got comparables in the likes of Albert Pujols, Alex Rodriguez, Mark Texeira, Josh Hamilton, Ryan Howard, Jayson Werth, Robinson Cano and others. These players were bona fide franchise talents when their deals were signed. There’s no guarantee they’ll even be playing at a Major League level when they’re set to expire.

Those players’ upside lies in the first few years of their new deals. It’s all downhill from there.

That is the peril of signing the most lucrative free agent names available. Hungry general managers tend to see what players have already done, signing them for the work they have completed while eventually being faced with the day in which they are forced to continue paying them no matter what kind of value they’re still able to provide.

With baseball likely to remain free of a salary cap, free agents of any strata are almost always going to be a prohibitively expensive option if a team can address the same position from within their own system.

The key then? Sign young players with upside.

That’s what the Pirates have begun to do, with hefty contract extensions for McCutchen and Marte and, to a lesser degree, Morton.

Of course, such youngsters aren’t as proven as their richer, older counterparts. Nonetheless, signing players of any age to long term deals is always going to be a risk.

What the Pirates have risked with their long-term, big-money commitments is that a young player won’t live up to his ceiling and thus, live up to the value of his deal. Those assets at least remain tradeable, if only for their age and the thought that they can be rehabilitated in a new environment. What the league’s big spenders in Los Angeles, Detroit and Seattle have risked is that their long-term, big-money commitments will begin to erode before their contracts have even neared their final seasons.

Those are two diametrically opposed spending philosophies, but one of them is saddled with a price tag that tends to be tens (if not hundreds) of millions of dollars more painful.

We’ve previously called for the Pirates to undertake the model employed by the Atlanta Braves and begin signing their budding stars to long-term contract extensions before those players reach their peak years. McCutchen’s deal worked in that vein, but his deal was a no-brainer. Marte’s extension proved that the Pirates are indeed out to follow the Braves model, and it’s a good one.

Teams have to risk money somewhere if they are to be competitive. Pittsburgh, as is wont for a small market team that spends well, is risking its dollars on its own high-upside product.

People like to give the Pirates a hard time for their spendthrift ways. Thankfully, it’s difficult to imagine this management group painting itself into the financial corner the way the Tigers, Phillies and Angels have done with on-the-downside stars like Cabrera, Howard and Pujols.

After last season’s playoff run, the Bucs are beginning to resemble the league’s richer half — in talent, if not in payroll. Such payrolls resemble a different sport entirely. The Pirates just haven’t reached that point yet.